Emerging Stocks Snap Two-Day Loss as Technology Shares Rally

Dec. 24 (Bloomberg) -- Emerging-market stocks gained for
the first time in three days, led by information technology
companies. Utility and material producers fell, following
commodities lower, amid the U.S. budget deadlock.

Samsung Electronics Co., the world’s biggest maker of
smartphones, added 2.2 percent in Seoul after Taurus Investment
Securities said its earnings will beat estimates. OAO Rosneft,
Russia’s largest oil producer, led gains in Moscow after signing
loan agreements for $16.8 billion to finance the acquisition of
TNK-BP. OAO Mechel, Russia’s largest coking-coal producer,
dropped the most in six weeks.

The MSCI Emerging Markets Index rose 0.1 percent to
1,043.73 in New York, with 326 shares advancing, 303 retreating
and 192 unchanged, while markets from Brazil to Romania were
closed for the Christmas holiday. U.S. lawmakers said last week
they were losing confidence that Congress and President Barack
Obama can reach a deal to avoid more than $600 billion in tax
increases and spending. The 21 nations in the developing-nations
gauge send about 17 percent of their exports to the U.S. on
average, World Trade Organization data show.

“How investors view progress, or the lack thereof, will
dictate how all markets close the year and the stance toward
risk assets when trading resumes on Wednesday.” Chris Weafer,
chief strategist at Sberbank Investment Research in Moscow,
wrote in an e-mailed note today.

The developing-nations measure has risen 14 percent this
year, outpacing a 13 percent increase by the MSCI World Index.
The emerging-markets index trades at 12 times estimated
earnings, compared with the MSCI World’s multiple of 13.8,
according to data compiled by Bloomberg.

Egypt Cut

Egypt’s credit rating was cut to the same junk level as
Greece by Standard & Poor’s on escalating political tension that
may render aid to the North African nation from the
International Monetary Fund “inactive.” The most-populous Arab
country’s rating was lowered by one level to B-, six steps below
investment grade, with a negative outlook, S&P said today.

Stock markets in Jakarta and Manila are closed for public
holidays today, while markets in Hong Kong and South Africa
finished trading at noon local time. Bourses in Brazil, the
Czech Republic, Hungary, Poland and Romania are closed.

In Asia, Hong Kong, India, South Korea, Malaysia,
Indonesia, Pakistan and the Philippines will be shut for
holidays tomorrow, while China, Taiwan, Thailand, Vietnam and
Sri Lanka will be open.

Russia Stocks

Russia’s Micex Index gained less than 0.1 percent as oil
traded near the lowest level in almost a week in New York, while
the ruble strengthened versus the dollar ahead of tax payments.

The BSE India Sensitive Index advanced for the first time
in three days, adding less than 0.1 percent, as software
exporters and drugmakers led the increase. The benchmark index
in Turkey added 0.8 percent.

The Romanian leu gained 0.6 percent versus the euro, the
strongest level since May. Prime Minister Victor Ponta’s
government won parliamentary approval, allowing the new cabinet
to progress a 2013 budget and start talks for a new
international precautionary credit. The parliament will probably
vote on the budget at the end of January, Ponta told reporters
in Bucharest on Dec. 22.

Norilsk Dividend

OAO GMK Norilsk Nickel dropped 1.3 percent as the world’s
largest producer of nickel and palladium may pay as much as $9
billion in dividends over the next three years, according to
United Co. Rusal, owners of a 25 percent stake in Norilsk,
according to data compiled by Bloomberg.

Borusan Mannesmann Boru Sanayi ve Ticaret AS, a Turkish
manufacturer of pipes, rose 2.6 percent, the biggest gain since
Aug. 28. The company plans to invest $150 million in a U.S.
plant by the second half of 2014, it said in a statement to the
Istanbul Stock Exchange today.

First Gulf Bank PJSC added 0.9 percent, closing at the
highest since August 2008. The Abu Dhabi-based lender will
probably post the fastest loan growth in the United Arab
Emirates in 2013, helping boost profit, EFG-Hermes Holding SAE
said this month. Net income this year is set to grow 6 percent
to 3.94 billion dirhams (1.07 billion), according to the average
estimate of 11 analysts compiled by Bloomberg.

Extra Yield

The extra yield investors demand to own emerging-market
debt over U.S. Treasuries narrowed three basis point, or 0.03
percentage point, to 265 basis points, according to JPMorgan
Chase & Co.’s EMBI Global Index.

“Most investors are very cautious” about the U.S. budget
negotiations, Sasikorn Charoensuwan, head of research at Phillip
Securities (Thailand) Pcl in Bangkok, said by phone today. “The
concern should hinder any aggressive equity investments in the
emerging markets.”

A gauge of technology companies rose 0.8 percent, the best
performance of 10 industry groups and the most since Dec. 13.

Samsung rebounded in Seoul from its biggest decline in
almost four months on Dec. 21. Earnings in the fourth quarter
will beat market consensus on “strong” smartphone sales,
Taurus Investment said in a report today.